CHENNAI: French tyre maker Michelin will significantly raise 2015 production by over 45% to 16,000 tonne from 11,000 tonne, riding on a growing demand for radial tyres.

Michelin's only India factory sits 60 km from Chennai in a State Government-leased plot covering 290 acres. It began commercial production last year, focusing on radial tyres, which is growing 14% in India.

Michelin addresses a market of 16 million truck tyre units a year. It holds a 12-15% market share in the radial tyres market in India, despite the fact that its Tyres are available at a 7-8% premium over its competitors in the medium and heavy vehicles segment.

On capacity expansion, the company's president for Africa, India and Middle East, Nour Bouhassoun, said: "The challenge we face to raise capacity to the extent which the market is growing, which is at a healthy 14% clip. As of now there are no specific targets on expansion," he said.

Michelin addresses a market of 16 million truck tyre units a year. It holds a 12-15% market share in the radial tyres market in India.

Michelin had committed to invest Rs 4000 crore and is on track to achieve the target, he said.

The company has launched a tubeless radial tyre manufactured specially for Indian conditions. Although it is in talks with various original equipment markers in the passenger car segment in India for tyre supply, its current focus will not shift from commercial vehicle tyres, said Mohan Kumar, commercial director, Michelin.

The company is looking at setting up an R&D centre in India that will look at working with car makers to work out new designs.

Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.